Senate to Hold Hearings on Sweepstakes Fraud

Thousands of people spend as much as $1,000 a year on mail-order products they don’t need or want in the false belief the purchases will boost their chances of winning big prizes, according to two U.S. senators investigating sweepstakes fraud. And at least one company has developed a mailing list of 125,000 customers who make frequent purchases, said Sen. Thad Cochran (R-Miss.) and Sen. Susan Collins (R-Maine), who plan to hold hearings to investigate consumer fraud involving the lure of multimillion-dollar giveaways. Federal law prohibits companies from requiring a purchase or charging a fee to people who enter sweepstakes. People who don’t buy magazine subscriptions, for example, from American Family Publishers or Publishers Clearing House, must have the same chance of winning a prize as people who do buy. The Senate hearings also will look into mailed advertising that looks like government documents or negotiable checks.